Zevotek, Inc. (OTC:ZVTK) is flicking up and down as traders remain indecisive about the stock value after the company rolled out several big announcements.
Another stock price stir was created by the recent news that the company will roll out an extensive TV advertising campaign for the ionic light bulbs. The ads should be aired more than 1,000 times in January 2011 and are expected to drive the sales up.
As always, the share price reaction looks premature considering the material changes have not occurred and the fundamentals remain troubled.
An earlier price rally has demonstrated the nature of news driven excitement, when the price swung wildly in the first days but the stock lost liquidity and depreciated shortly afterwards. The newest announcement carries little reason for appreciation and the price rally counts only on the excitement of day traders.
The previous price rally had more merit as it was induced by the announced acquisition of a water saving technology used in households and as presentations carried out the advertising of the company’s ionic light bulb product. [BANNER]
Despite the intentions to advertise the bulb, the price is mostly influenced by the underlying financials, which aren’t much impressive:
• no cash
• heavily leveraged balance sheet
• minuscule revenues to date
• continuing losses due to overwhelming expenses
The business won’t advance without additional funding, which in the penny stock industry usually comes with a high risk of dilution for shareholders.
